Laos Economic Outlook

November 13, 2018

The economy likely continues to expand at a healthy pace in H2, aided by solid regional activity and healthy inward investment. This comes after growth in H1 was driven by the power generation and construction sectors. However, the mining sector performed poorly, while tourism inflows have likely disappointed so far this year, dampened by poor weather and a dam collapse in July. To reinvigorate the tourism industry, the government recently announced a 2019 promotional campaign centered on boosting Chinese visitor arrivals. Despite economic progress, vulnerabilities remain. According to the Central Bank, the current account deficit rose in the first half of the year, while in June international reserves fell to their lowest level in almost a year.

Laos Economic Growth

Growth should be robust going forward, thanks to stronger power generation, ongoing FDI inflows and infrastructure investment. However, a weak external position and vulnerability to weather fluctuations pose downside risks. Met the why particular Consensus Forecast panelists expect GDP to expand 6.9% in 2019, which is unchanged from last month’s forecast, and 6.8% in 2020.

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